Repeal Obamacare? Hogan’s Conundrum

By Barry Rascovar

July 10, 2017 – Though he’s a Republican, Maryland Gov. Larry Hogan must pray each night that his fellow Republicans in Congress fall flat on their faces in their concerted efforts to wipe out Obamacare and replace it with a vastly inferior health care safety net.

Hogan quietly voiced opposition to House and Senate “repeal and replace” bills in a statement he had issued in Annapolis while on an overseas trip.

He’s trying hard to avoid offending Maryland Republicans who support an immediate repeal of the Affordable Care Act. Yet he’s acutely aware of the harm, and human pain, such a move would have on hundreds of thousands of Marylanders.

Maryland is in a unique situation when it comes to the “repeal and replace” movement. Ending Obamacare could place this state’s entire hospital system in jeopardy. Hospitals in the Free State stand to lose a staggering $2.3 billion in Medicare and Medicaid payments if Obamacare abruptly ends.

Obamacare and Hogan

Maryland Gov. Larry Hogan

Some hospitals, especially in rural parts of the state and in poor urban neighborhoods may not survive. One national study indicated up to 50% of all rural hospitals in the United States could close under an Obamacare repeal. In Louisiana, Mississippi and Texas, up to 75% of rural hospitals could be driven out of business.

Nursing homes are under the gun, too, since two-thirds of its patients are on Medicaid, which is the primary budget-cutting target of congressional Republicans.

‘Tremendous Impact’

Passage of either the House or Senate repeal bills “could have a tremendous impact on Maryland,” according to the non-partisan Department of Legislative Services. This would “require the General Assembly [and the governor] to consider significant financial and policy decisions.”

That’s something Hogan cannot afford in 2018 as he runs for re-election. Yet the governor could find himself between the proverbial rock and a hard place next year, thanks to conservative Republicans in control of the House, Senate and White House.

The price to Maryland state government of an Obamacare repeal is in the billions. Maryland government would lose $1.3 billion in federal Medicare and Medicaid funds next year, growing to a loss of $1.5 billion in federal dollars in 2022.

If the law is repealed, Hogan and Democratic legislators in Annapolis would face a monstrous and agonizing choice.

Do they jettison Obamacare’s expansion of Medicaid that now gives health insurance to 421,000 state citizens, many of them children? Do they leave 1 million Marylanders now covered through subsidized private insurance plans or the Medicaid expansion to the tender mercies of insurance companies?

Or are Hogan and lawmakers going to jump in, swallow hard and raise taxes – in an election year – by a huge amount to cover the lost $1.35 billion next year?

That’s why deep down inside, Hogan really but really wants Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan to give up their insistent request to wipe out Obamacare and instead work with Democrats on a compromise plan that preserves the best parts of the ACA and fixes what’s not working.

Seeking a Magic Bullet

The odds of McConnell and Ryan finding a magical “repeal and replace” formula that satisfies the majority of Republicans are not good. It may yet happen but time isn’t on their side.

The more voters learn about specifics of the Republicans’ replacement proposals, the stronger the opposition. Over the July 4 holiday, GOP lawmakers who dared to venture out received heated criticism from constituents.

Part of the problem is that McConnell and Ryan are attempting to peddle a plan that calls for an unprecedented version of “income re-distribution.”

Obamacare re-distributed taxes collected from the rich, insurance companies, durable medical equipment companies and tanning salons. The ACA spent that money to help provide health insurance to the poor and lower-income families.

Now Republicans are calling for a reversal of this process – giving back all that tax money to wealthy Americans and profitable corporations while stripping from the poor and lower-class much of their health care benefits.

It’s “Robin Hood in Reverse,” in this case congressional Republicans want to take from the poor and give to the rich.

Had the GOP plans created an alternative health care safety net that protected the rights of the elderly, poor and near-poor, the furor today might have been averted. But in their haste to wipe out Obamacare, Republicans in Congress failed to develop a legitimate replacement program that would make things better, not worse.

Obamacare in Maryland

In Maryland, there have been good results from Obamacare. The state’s uninsured rate has dropped more than half, to an all-time low of 6.6%. This is a godsend for hospitals, which saved $311 million in just two years due to the shrinkage of uncompensated care cases.

Big problems remain in the current system. Large premium increases are pending before Al Redmer, the state insurance commissioner (and a likely Republican candidate for Baltimore County Executive next year).

If Redmer approves large rate hikes, many of those currently insured may be priced out of the market. The state’s uninsured rate could soar and hospitals could run deficits.

But if Redmer rejects those big rate hikes, private insurers may have no choice but to drop out of the Maryland marketplace, as Cigna recently did.

Regardless of what happens in Washington and what Redmer decides, Maryland’s health-care safety net is in danger of tearing apart – unless Hogan and state legislators are willing to intervene.

That’s a tough call in an election year, especially for a governor who made a no-new-taxes pledge.

But the Republican governor and Democratic leaders in the General Assembly may have no choice.

Fixing the existing system is far easier than wiping out Obamacare and starting from scratch. Either way, though, State House politicians likely will have some heavy lifting to do early next year. ##